Will GST 2.0 Reforms Provide Major Relief for the Common Man?

Jodhpur, Sep 4 (NationPress) Laghu Udyog Bharati has expressed a warm welcome to the reforms unveiled under GST 2.0, considering them a significant relief for the common citizen and a driving force for economic development. The modifications, ratified during the 56th GST Council meeting and revealed by Finance Minister Nirmala Sitharaman, are designed to simplify the tax framework and enhance business optimism across various sectors.

In an interview with IANS, Ghanshyam Ojha, National President of Laghu Udyog Bharati, remarked, “The new GST structure will now feature just two slabs: 5 per cent and 18 per cent for everyday goods. This rationalization will make essential products like soap, shampoo, air conditioners, and small cars more affordable for the average person.”

Mahavir Chopra, State Vice President of Laghu Udyog Bharati, added, “The Finance Minister has also declared that basic food items including milk, roti, paratha, and chenna will be exempt from GST. Furthermore, individual health and life insurance will not attract any GST, along with 33 essential medicines, including those for rare and critical conditions. It’s a moment of great joy that the GST Council has embraced these reforms, including rate cuts and structural enhancements.”

“Recently, we were encouraged by the rise in GDP. I hinted earlier that some decisions would surprise everyone. With insurance becoming tax-free and items that were once priced out of reach due to high taxes now becoming affordable, this will positively impact both individuals and businesses,” he stated to IANS.

Luxury items and harmful goods, such as tobacco and alcohol, will now see a higher GST rate of 40 per cent, increased from 28 per cent.

“Medium and large vehicles will incur a higher tax, yet we anticipate overall GST revenue to rise due to improved compliance and a larger tax base,” Chopra noted.

Local entrepreneur Suresh Kumar Vishnoi emphasized, “The government is genuinely providing relief to the masses. This is a monumental step forward and will yield enduring benefits for all segments of society.”

The reforms are projected to benefit farmers, MSMEs, women, youth, and especially the middle class. Small traders will also find it easier to operate under the streamlined framework. GST 2.0 aims to simplify the tax regime, rectify the inverted duty structure, and lessen the financial load on citizens.

The inverted duty structure, where GST on raw materials exceeds that on finished goods, has long been a hurdle for manufacturers, often inflating production costs and adversely affecting small industries. The reforms now seek to rectify this issue.

From a consumer standpoint, the revised rates will lower the costs of daily essentials, health insurance, and small vehicles. The elimination of 18 per cent GST on individual health insurance for families and senior citizens is particularly noteworthy, as it enhances healthcare accessibility.

With the GST Council endorsing historic changes to India’s indirect tax system, a range of everyday goods will see price reductions starting September 22.

The newly adopted tax structure now features two main slabs: 5 per cent and 18 per cent, along with a substantial 40 per cent for luxury and sin products.

For the average citizen, this shift means more disposable income, which the government anticipates will be reinvested into the economy, providing a significant uplift.

From groceries and fertilizers to footwear, textiles, and even renewable energy, an extensive array of goods and services is poised to become more affordable. Items previously taxed at 12 per cent and 28 per cent will largely transition to the other two slabs, rendering a wide variety of products cheaper.